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Poshmark is required to provide a tax form to any seller with $600 or more in gross sales in the 2023 calendar year.
You should report any capital gains you make on Schedule D of your tax return. If you owned the item for less than a year, you'll pay regular income tax on the gain. If you owned it for more than a year, you'll pay capital gains taxes, which are typically lower than your personal tax rate.
The Tax Law exempts purchases for resale; most sales to or by the federal and New York State governments, charitable organizations, and certain other exempt organizations; sales of most food for home consumption; and sales of prescription and nonprescription medicines. Sales tax also does not apply to most services.
New York is a destination-based sales tax state. So if you live in New York, collecting sales tax can be a bit complicated. You should be charging everyone in your state the rate where the item is being delivered. That could include a combination of state, county, city, and district tax rates.
Whether or not you will owe taxes for selling personal items, goods, or services online will depend on several factors, including whether you made a profit. Usually, you need to pay federal income taxes and self-employment taxes if you make more than $400 during the tax year.
Etsy businesses that expect over $1,000 in gross sales income must pay quarterly taxes. You can either use the taxable income you made in the previous year or determine estimated tax payments by deducting business expenses from the expected annual gross income.
Starting in 2023, the threshold changes to $600, meaning many more online sellers will receive 1099-K forms going forward. You should report your taxable online sales to the IRS, regardless of whether a 1099-K is issued. However, when the IRS receives a 1099-K, they can see how much you transacted.
New York City local sales and use tax rate of 4.5 percent. New York State sales and use tax rate of 4.0 percent. Metropolitan Commuter Transportation District surcharge of 0.375 percent.